Invoice Payment Terms Explained: Net 15 vs Net 30 vs Due on Receipt

Invoice payment terms define when and how a client should pay. They decide how long your money is tied up after the work is done. Shorter terms are associated with fewer overdue invoices: in QuickBooks' 2026 survey of US small businesses, 55% of those on Net 30 terms had overdue invoices, against 26% of those asking for immediate payment (QuickBooks). That shows a link, not cause and effect. This guide explains each common payment term, when to use it, the legal limits, and how to make clients pay on time.

What Are Invoice Payment Terms?

Invoice payment terms are the conditions you set for how and when payment is due. They appear on your invoice and typically include:

• When payment is due (the deadline)
• How to pay (bank transfer, online payment, check)
• What happens if payment is late (late fees, interest)
• Discounts for early payment (if offered)

Payment terms are usually agreed before work begins, ideally in your contract or statement of work. Repeating them on every invoice reinforces the agreement and gives the client's accounts payable team clear instructions. Always print the actual due date as well as the term, so nobody has to count days.

Common Payment Terms Explained

Due on Receipt

Payment is expected as soon as the client receives the invoice. It is the shortest term and works best for:

• Small, one-time transactions
• New clients you haven't worked with before
• Consumer-facing services
• Work where you have strong bargaining power

Typical use: one-off jobs, small freelance projects, services for individuals.

Net 7

Payment is due within 7 calendar days of the invoice date. A middle ground between "due on receipt" and longer terms.

Typical use: freelancers doing recurring work, small agencies.

Net 14 (or Net 15)

Payment is due within 14 (or 15) calendar days. A common choice for freelancers and small businesses that need steady cash flow but want to give clients a reasonable window.

Typical use: freelancers, consultants, creative agencies, small service businesses.

Net 30

Payment is due within 30 calendar days of the invoice date: an invoice dated March 1 is due March 31. Net 30 is widely used between businesses, and it matches the window US federal agencies generally work to: payment within 30 days of receiving a proper invoice under the Prompt Payment Act, unless the contract says otherwise. Our Net 30 payment terms article covers it in depth.

Typical use: business-to-business services, consulting, agencies working with larger clients.

Net 45 and Net 60

Longer terms that some large companies ask for. They favor the buyer and tie up your cash for up to two months, so accept them only when the deal justifies it and price the wait in. In the EU, business-to-business terms longer than 60 days are allowed only if expressly agreed and not grossly unfair to the supplier (Directive 2011/7/EU).

Typical use: enterprise contracts, large corporate clients.

2/10 Net 30

The client gets a 2% discount if they pay within 10 days; otherwise the full amount is due in 30 days. For the client, taking the discount is a 2% return for paying 20 days early, about 36.5% a year in simple terms (2% × 365 ÷ 20). For you, that makes it an expensive way to be paid sooner, so use it where faster cash is worth that price. Our discount calculator works out the figures for any discount.

Typical use: wholesale, manufacturing, established business-to-business relationships.

End of Month (EOM)

Payment is due at the end of the month in which the invoice is issued: an invoice dated March 15 is due by March 31. Some businesses use "Net 30 EOM" to mean 30 days after the end of the invoice month, so spell out the due date to avoid confusion.

Typical use: clients with monthly payment runs, retainer agreements.

Milestone-Based

Payment is tied to project deliverables rather than calendar dates. Common structures:

• 50% upfront, 50% on completion
• 30% upfront, 30% at midpoint, 40% on completion
• Payment at each defined project phase

Typical use: larger projects (web development, construction, consulting engagements). See our guide to milestone-based invoicing.

How to Choose the Right Payment Terms

The best payment terms balance your cash flow needs with what your clients will accept.

Consider Your Cash Flow

If you rely on each payment to cover monthly expenses, shorter terms (Net 7 or Net 14) matter. If you have a financial buffer, Net 30 may be fine and can make you easier to buy from.

Consider Your Industry

Norms differ by sector, and the data shows it. In the UK's 2025 statistics on large businesses' payment practices, manufacturers took 45 days on average to pay their suppliers, against 21 days in finance and insurance, with an overall average of 32 days (GOV.UK). Ask a few clients and peers what they expect, and see our payment terms statistics for more.

Consider the Client

Start new clients on shorter terms until they have paid reliably. Long-term clients with a good payment history can earn longer terms. Large corporations may insist on their own standard terms; factor the wait into your price.

Consider the Project Size

For large projects, milestone billing protects both parties. You don't carry months of unpaid work, and the client doesn't pay everything before seeing results.

How to Get Clients to Pay On Time

Setting payment terms is only half the job. Here's how to make them stick:

Include payment terms on every document. Contract, proposal and invoice should all state the same terms.

Send invoices immediately. Invoice the day you deliver. Terms usually run from the invoice date, so every day you wait to invoice adds a day to your wait for payment.

Make payment easy. Include clear bank transfer instructions or an online payment link. In InvoiceQuickly, Pro can add a Stripe or PayPal payment link for the invoice's remaining balance, using your own Stripe or PayPal account; the money goes straight to you, and InvoiceQuickly never holds it.

Send reminders before the due date. A friendly reminder a few days before the due date catches invoices that would otherwise slip. InvoiceQuickly Pro can send scheduled reminders before and after the due date.

Apply your late fee policy. State your late fee terms clearly and apply them consistently. Even if you waive the fee as a goodwill gesture, telling the client shows you track payments. Our late fee calculator shows what a given annual rate means in money for a given number of days.

Use early payment discounts selectively. A 2% discount for payment within 10 days can bring cash in sooner, but at about 36.5% a year it is costly, so reserve it for cases where faster payment is worth it.

Follow up promptly on overdue invoices. The longer an invoice goes unpaid, the harder it is to collect. Our payment reminder tool gives you three ready-to-edit templates (gentle, firm and final) to copy into your email.

Late Payment Fees: What You Can Charge

Late fees compensate you for the cost of delayed payment and give clients a reason to pay on time. What you can charge depends on your contract and the law where the contract applies.

Percentage-based: a monthly or annual rate on the overdue balance, for example 1.5% a month, if your contract and local law allow it.

Flat fee: a fixed amount (for example $25) added to overdue invoices. Simpler, but less proportional to the debt.

Statutory interest and compensation: some jurisdictions give businesses a default right to interest when the contract sets no rate:

• UK: under the Late Payment of Commercial Debts (Interest) Act 1998, business-to-business debts carry statutory interest of 8% plus the Bank of England base rate, unless the contract sets a different rate. The base rate used is the one in force on 30 June for July to December and on 31 December for January to June, so for July to December 2026 the rate is 11.75% a year. You can also claim a fixed sum of £40 for debts up to £999.99, £70 up to £9,999.99 and £100 above that.
• EU: Directive 2011/7/EU sets late-payment interest for business-to-business transactions at the central bank reference rate plus at least 8 percentage points, and a fixed €40 for recovery costs. Each member state applies it through national law.
• US: there is no federal rule on late fees for business invoices. Limits come from the contract and from state interest and usury laws, and some states set a default rate where none was agreed: Texas allows 6% a year from the 30th day after the amount is due (Texas Finance Code §302.002), and California 10% a year after a breach of contract where no rate was stipulated (Cal. Civ. Code §3289). See our late fee laws by state guide.

Worked example (UK): a £2,400 invoice dated 1 August 2026 on Net 30 terms is due 31 August. The client pays 20 days late, on 20 September 2026, and your contract sets no rate. Statutory interest is £2,400 × 11.75% × 20 ÷ 365 = £15.45, and because the debt is between £1,000 and £9,999.99 you can also claim the £70 fixed sum. (Interest for days falling in January to June is calculated at the rate set on 31 December, so check the rate for each period.)

Always put your late fee policy in your contract and on your invoices before you need it. In InvoiceQuickly, only draft invoices can be edited, so bill a late charge on a separate invoice that references the original; our past-due invoice template shows how, and overdue invoice interest covers the statutory rates in more detail.

This is general information, not legal advice. Check the law that governs your contract, or ask an adviser. Last reviewed: 2026-10-28.

Payment Terms by Situation

Set Up Your Payment Terms Today

The right payment terms protect your cash flow and set clear expectations with every client. In InvoiceQuickly, you set default payment terms once (30 days unless you change it), and every invoice prints its due date and your terms. Describe the work, check the terms, review the draft and download the PDF. Start free, or compare plans and pricing for payment links and scheduled reminders.